Power of Attorney for Real Estate Transactions

There are many scenarios where someone may need to legally act on behalf of another—transferring property, making medical decisions and signing legal documents, to name a few. In these situations, a power of attorney can be granted to a second individual by a first individual to allow that second individual to sign a document, make a deal, complete a transaction, or transfer real estate on behalf of that first individual.

In Michigan, there is no statute that directly prohibits a broad grant of authority, but there are a few caveats that individuals granting a power of attorney should keep in mind. It has been long held in Michigan that any authority granted by a power of attorney is strictly construed. Bergman v. Dykhouse, 316 Mich. 315 (1946); Crane v. Kangas, 53 Mich. App. 653 (Mich. Ct. App. 1974). Michigan courts have reiterated that sentiment by holding that “an agent acting under a power of attorney may only perform those acts specified within the power of attorney.” NOA v. M&M Enterprizes, Inc., 2001 Mich App. LEXIS 754 (Mich. Ct. App. 2001).

This need for specificity is particularly true when dealing with real estate matters. The Michigan Supreme Court held that “authority to sell real estate must ordinarily be conferred in clear and direct language.” Bergman, 316 Mich. at 319. This holding was relied upon by the courts in both Crane and NOA as well. Ultimately, clear and precise language outlining authority is crucial in drafting any power of attorney, and if you are receiving or granting such authority, especially with regard to real estate, you should consult with a qualified attorney.